Influence of Price and Distributive Fairness on Micro Finance Customers’ Relationship Commitment: PLS-SEM Analysis

Abstract

Bangladeshi Micro Finance Institution (MFI) sector is highly competitive in financial industry. Due to strong multifaceted competition customer drop out (exit/switching) is taking place. In fact, to achieve sustainability, MFIs need to reduce the dropout rate and to retain customer by developing relationship commitment (RC). Hence, the aim of the empirical study is to find out how the clients drop out from the MFI can be prevented through developing relationship commitment in the relational exchange context. The study focuses on the price fairness and distributive fairness as an antecedent of relationship commitment. The PLS-SEM technique is utilized for the analysis of data collected from 409 consumers of different MFI’s of Bangladesh. The study employed survey method for getting responses from MFI consumers about price fairness, distributive fairness and relationship commitment related statement. The study explores that price fairness, distributive fairness, has significant effect on relationship commitment. Hence, the findings of this model may be applied by the policy makers and the practitioners as an approach to enhance relationship commitment in the MFI’s in developing economy context.

Impact of organizational characteristics on employees’ entrepreneurial orientation with mediating role of knowledge process capabilities and moderating role of psychological factors in the era of COVID-19

“…Meanwhile, there are different factors due to which the t -values are higher than 0, such as confidence interval, level of freedom, and the directivity of hypothesis ( Hair et al, 2017 ). The assessment of the structural model employs the bootstrapping procedure by running 500 bootstrap samples on 274 cases to evaluate the path coefficients’ significance ( Hair et al, 2016 ; Shuhaiber, 2018 ; Islam, 2019 ). The direct and mediation estimates of the structural model are shown in Figure 2 .…”

“…In an attempt to obtain a higher response rate, the questionnaires were distributed manually (by hand) by the researcher to ascertain data reliability and validity (Kante et al, 2018). The attempt yielded 334 reverted questionnaires, i.e., a response rate of 76.2%, which fulfills the recommended threshold by Islam (2019). Out of the 374 returned questionnaires, 43 were unusable as some of the essential sections in the questionnaires were left incomplete.…”